# American Institute of Mathematical Sciences

October  2014, 10(4): 1147-1168. doi: 10.3934/jimo.2014.10.1147

## Optimal ordering policies and sourcing strategies with supply disruption

 1 School of Software, Dongguan University of Technology, Dongguan 523808, Guangdong 2 Institute of Applied Mathematics, Academy of Mathematics and Systems Sciences, Chinese Academy of Sciences, Beijing 100190 3 School of Economics and Business Administration, Chongqing University, 400044, Chongqing, China

Received  August 2011 Revised  September 2013 Published  February 2014

Successful supply chain management has to find an effective sourcing strategy to cope with uncertainty in both supply and demand. Most of existing literature deals with the problems related to the uncertain demand, however, in this paper, we discuss a model in which a firm is in the face of demand uncertainty and supplier reliability uncertainty at the same time prior to a single selling season. The firm has two instants to order from two suppliers (one supplier is completely reliable and the other is unreliable), while the unreliable supplier's reliability is uncertain at instant 1 and is completely observed at instant 2. To determine the cost-minimizing ordering strategies at both instants, the firm has to evaluate the trade-off between a more accurate forecast and a potentially higher unit cost at instant 2. We present the optimal supplementary order quantities with the realized reliability and give the optimal ordering policies and sourcing strategies at instant 1 under certain conditions. We find conditions under which the order quantity from the unreliable supplier at instant 1 is decreasing in the reorder costs at instant 2.
Citation: Xiaoming Yan, Minghui Zhang, Ke Liu, Yong Wang. Optimal ordering policies and sourcing strategies with supply disruption. Journal of Industrial & Management Optimization, 2014, 10 (4) : 1147-1168. doi: 10.3934/jimo.2014.10.1147
##### References:

show all references

##### References:
 [1] Ata Allah Taleizadeh, Leopoldo Eduardo Cárdenas-Barrón, Roya Sohani. Coordinating the supplier-retailer supply chain under noise effect with bundling and inventory strategies. Journal of Industrial & Management Optimization, 2019, 15 (4) : 1701-1727. doi: 10.3934/jimo.2018118 [2] Hongjun Peng, Tao Pang. Financing strategies for a capital-constrained supplier under yield uncertainty. Journal of Industrial & Management Optimization, 2017, 13 (5) : 1-23. doi: 10.3934/jimo.2018183 [3] Sanjoy Kumar Paul, Ruhul Sarker, Daryl Essam. Managing risk and disruption in production-inventory and supply chain systems: A review. Journal of Industrial & Management Optimization, 2016, 12 (3) : 1009-1029. doi: 10.3934/jimo.2016.12.1009 [4] Min Li, Jiahua Zhang, Yifan Xu, Wei Wang. Effect of disruption risk on a supply chain with price-dependent demand. Journal of Industrial & Management Optimization, 2017, 13 (5) : 1-21. doi: 10.3934/jimo.2019095 [5] Bibhas C. Giri, Bhaba R. Sarker. Coordinating a multi-echelon supply chain under production disruption and price-sensitive stochastic demand. Journal of Industrial & Management Optimization, 2019, 15 (4) : 1631-1651. doi: 10.3934/jimo.2018115 [6] Kun-Jen Chung, Pin-Shou Ting. The inventory model under supplier's partial trade credit policy in a supply chain system. Journal of Industrial & Management Optimization, 2015, 11 (4) : 1175-1183. doi: 10.3934/jimo.2015.11.1175 [7] Kar Hung Wong, Yu Chung Eugene Lee, Heung Wing Joseph Lee, Chi Kin Chan. Optimal production schedule in a single-supplier multi-manufacturer supply chain involving time delays in both levels. Journal of Industrial & Management Optimization, 2018, 14 (3) : 877-894. doi: 10.3934/jimo.2017080 [8] Qiang Lin, Ying Peng, Ying Hu. Supplier financing service decisions for a capital-constrained supply chain: Trade credit vs. combined credit financing. Journal of Industrial & Management Optimization, 2017, 13 (5) : 1-22. doi: 10.3934/jimo.2019026 [9] Jingming Pan, Wenqing Shi, Xiaowo Tang. Pricing and ordering strategies of supply chain with selling gift cards. Journal of Industrial & Management Optimization, 2018, 14 (1) : 349-369. doi: 10.3934/jimo.2017050 [10] Nina Yan, Baowen Sun. Comparative analysis of supply chain financing strategies between different financing modes. Journal of Industrial & Management Optimization, 2015, 11 (4) : 1073-1087. doi: 10.3934/jimo.2015.11.1073 [11] Sunmi Lee, Romarie Morales, Carlos Castillo-Chavez. A note on the use of influenza vaccination strategies when supply is limited. Mathematical Biosciences & Engineering, 2011, 8 (1) : 171-182. doi: 10.3934/mbe.2011.8.171 [12] Masoud Mohammadzadeh, Alireza Arshadi Khamseh, Mohammad Mohammadi. A multi-objective integrated model for closed-loop supply chain configuration and supplier selection considering uncertain demand and different performance levels. Journal of Industrial & Management Optimization, 2017, 13 (2) : 1041-1064. doi: 10.3934/jimo.2016061 [13] Ming-Jong Yao, Tien-Cheng Hsu. An efficient search algorithm for obtaining the optimal replenishment strategies in multi-stage just-in-time supply chain systems. Journal of Industrial & Management Optimization, 2009, 5 (1) : 11-32. doi: 10.3934/jimo.2009.5.11 [14] Jianbin Li, Niu Yu, Zhixue Liu, Lianjie Shu. Optimal rebate strategies in a two-echelon supply chain with nonlinear and linear multiplicative demands. Journal of Industrial & Management Optimization, 2016, 12 (4) : 1587-1611. doi: 10.3934/jimo.2016.12.1587 [15] Jiaoyan Wang, Jianzhong Su, Humberto Perez Gonzalez, Jonathan Rubin. A reliability study of square wave bursting $\beta$-cells with noise. Discrete & Continuous Dynamical Systems - B, 2011, 16 (2) : 569-588. doi: 10.3934/dcdsb.2011.16.569 [16] Yi-Kuei Lin, Cheng-Ta Yeh. Reliability optimization of component assignment problem for a multistate network in terms of minimal cuts. Journal of Industrial & Management Optimization, 2011, 7 (1) : 211-227. doi: 10.3934/jimo.2011.7.211 [17] Bailey Kacsmar, Douglas R. Stinson. A network reliability approach to the analysis of combinatorial repairable threshold schemes. Advances in Mathematics of Communications, 2019, 13 (4) : 601-612. doi: 10.3934/amc.2019037 [18] S.M. Booker, P.D. Smith, P. Brennan, R. Bullock. In-band disruption of a nonlinear circuit using optimal forcing functions. Discrete & Continuous Dynamical Systems - B, 2002, 2 (2) : 221-242. doi: 10.3934/dcdsb.2002.2.221 [19] Jong Soo Kim, Won Chan Jeong. A model for buyer and supplier coordination and information sharing in order-up-to systems. Journal of Industrial & Management Optimization, 2012, 8 (4) : 987-1015. doi: 10.3934/jimo.2012.8.987 [20] Michelle L.F. Cheong, Rohit Bhatnagar, Stephen C. Graves. Logistics network design with supplier consolidation hubs and multiple shipment options. Journal of Industrial & Management Optimization, 2007, 3 (1) : 51-69. doi: 10.3934/jimo.2007.3.51

2018 Impact Factor: 1.025